Social ERP Emerges, Transforms the Way People Work (Part 1)

It is no secret that social networks and media—Facebook, Twitter, LinkedIn, Wikipedia, etc.—are having a huge impact on all aspects of people’s lives. Enterprise resource planning (ERP) systems are not immune to the tide of social media changes that are sweeping across the technology landscape. All the large ERP solution providers have made or are making large investments to keep up with the social revolution that is sweeping across the industry. The incorporation of social media capabilities within ERP systems is one of the truly disruptive developments occurring across the ERP space.

We at Technology Evaluation Centers (TEC) have already had very informative discussions with ERP vendors across the globe and have more lined up, and will bring to you their vision of social ERP. In this two-part blog post series, we will provide an overview of how a more social ERP system is beneficial to organizations and give a lineup of what the leading ERP vendors are doing to move toward more social ERP systems. In succeeding posts, we’ll drill down into vendors’ approaches to see where they are and where they are going in making their systems more social.

This market space is changing rapidly, with all the major players fighting to keep up with or stay ahead of the competition. There are new announcements coming out almost weekly in this area and we expect that this will continue until the space matures. In a few years, social collaboration in ERP systems will be something that is probably taken for granted—much like e-mail integration today.

Benefits of Social Media in ERP?

ERP system users with access to integrated social media capabilities are able to move away from reliance on disconnected e-mails and/or chat services for communications. Having an integrated social environment that employees use for communicating and collaborating can create tremendous value for an organization. A report from the McKinsey Global Institute titled “The Social Economy: Unlocking Value and Productivity Through Social Technologies” states in its summary that “by fully implementing social technologies, companies have an opportunity to raise the productivity of interaction workers . . . by 20 to 25 percent.”

An Aberdeen study released in August 2013 and titled “Solving Collaboration Challenges with Social ERP” states that “organizations that have implemented social ERP saw over twice the improvement in profit margins over the past two years than organizations that have not implemented social ERP.” These gains are not realized solely through socializing the ERP systems, but show that companies that have collaborative ERP systems are able to more effectively meet dynamic business challenges and become more profitable.

Another driving force in impacting all business systems is the introduction of Millennials in the workforce. Many of the new working generation grew up on the likes of MySpace, Facebook, Instagram, and Twitter. For this generation, being stuck on an aging ERP system to do their daily job is like being sent to their parents’ room to do their homework on the old PC running Windows XP. They simply won’t have it. Therefore, social technologies must be integrated with the ERP systems if a company is to realize the potential of the up-and-coming workforce.

Social Software Capabilities and Features

There are a broad range of social software features that help a company operate more efficiently. This is a listing of features to give a foundation for what to look for from a provider of social collaboration tools, including an ERP vendor:

Real-time conversations among members in the network

Internal and external parties can become part of the conversation

Conversation groups can be established on the fly

User social profiles can be set up to include interests, affiliations, etc.

A social community can be established for parties with similar interests

Documents can be commented on and annotated within a conversation

Conversations can be initiated on system objects (sales orders, work orders, projects)

Conversations can be linked to build extended conversations

Conversations are saved to a database for retrieval and analysis

Tasks can be created with one click from a conversation

Members can collect feedback via polls and pros/cons analysis

Users can generate and brainstorm ideas on process improvements, etc.

External social media data (Facebook, Twitter, etc.) can be integrated within the system

Users can broadcast messaging to external social media channels

Members can perform analytics on all content, internal and external, to give a 360-degree view of the customer

Users can take advantage of social listening, monitoring, and sentiment analysis

User Adoption Is Key

Although there is a huge amount of potential in social media capabilities, the key to realizing the benefits of the tool will come from widespread adoption. Only when everyone in the organization leaves behind e-mails and starts communicating solely within the social collaboration tool will the full potential of the tool be realized. For proper adoption, an organization might need to offer a few carrots to create momentum from within. The products being offered by the ERP vendors can enable adoption with great interfaces, helping employees do their job better, or even a tool for both work and home. But, like any other new technology, an organization has to be willing to put effort into making the promise of the tool a reality.

Unfortunately, the wide range of social collaboration tools on the market, both public and private, make it difficult to keep all the social threads synchronized. Between Facebook, LinkedIn, Yammer, Jam, Jive, and maybe a corporate private social account on the ERP system, a user might end up turning off all these feeds just to get back to work. We will probably see more tools to help manage social feeds and programming interfaces developed to allow these tools to interact more seamlessly. On the other hand, there may be another company that becomes the Facebook of corporate collaboration and all companies move to adopt that tool as the standard for corporate social collaboration, or it even might be Facebook itself.

Other Things to Consider—Data Governance and Organizational Policies

The social media or enterprise 2.0 functionality will definitely change the way people work, but all of this change will have other impacts on an organization. Opening up these communication channels may in fact open a Pandora’s box of potentially nonproductive or even abusive online behaviors. For example, a sales rep who is constantly sending notes to the shipping department asking when it is going to ship his/her orders could actually be counterproductive to the department. In a less social ERP system, the sales rep had no avenue other than to mail the “shipping dept” or call the department to get a status update. A savvy shipping department would be able to ignore the known offenders and keep doing its work in the more asocial system environment. Now, the shipping department could be flooded with messages that actually make it less productive.

All this information being tracked and stored in the corporate ERP system also may require additional human resources (HR) policies around what is acceptable online behavior. Additionally, notes taken by say a customer service rep on a product order might now have to be stored, managed, and reported on for eDiscovery situations. Though similar to e-mail, social content is more fluid and connected, so it will require a review of legal and HR policies before simply turning on the switch.

This concludes the first post of this series. Stay tuned for the second post, wherein we’ll offer a market lineup of the ERP players and their stance on providing social collaboration as part of their solutions.